FORMER PRESIDENT OF EXSORBET INDUSTRIES, MARKET MAKER, AND RETAIL BROKERS IN MICROCAP FRAUD CASE TO PAY $2.3 MILLION IN SETTLEMENT WITH SEC

The Securities and Exchange Commission announced today that on June 16, 2000, the U.S. District Court in Chicago, Illinois entered final judgments against Floyd Leland "Lee" Ogle, the former president of Exsorbet Industries, Inc. of Arkansas, and four other individuals in a microcap market manipulation fraud case involving cross-border trading in British Columbia, Canada. The court also entered final judgments against Reuben Peters of Chicago, a market maker in Exsorbet stock, and Chicago stockbrokers Albinas Kurkulis, Andrew Kurkulis, and Paul Kurkulis. These defendants consented to the judgments without admitting or denying the allegations in the SEC's complaint. A default judgment was entered against former Exsorbet Executive Vice President Gary Cotten, who was convicted of criminal securities fraud in an unrelated case in New York last year. The final judgments ordered the defendants to pay over $2.3 million in disgorgement of ill-gotten gains and civil penalties. Permanent injunctions were also entered against all the defendants.

The SEC's complaint filed February 1, 1999, alleged that the defendantsmanipulated the price of Exsorbet stock, which was traded on the National Quotation Bureau pink sheets, the Over-the-Counter Bulletin Board, and the NASDAQ Small Cap Market, from $1 to $13 a share from November 1993 through February 1996, by giving or receiving bribes for participation in the manipulative scheme, controlled the floating supply of Exsorbet stock, artificially fixing the opening price at $5 on the first day of public trading on February 4, 1994, and illegally dominating and controlling the secondary market in the stock. Exsorbet Industries produced a peat moss oil absorbent product that was purportedly useful in environmental cleanup. The SEC also alleged extensive cross-border manipulation of Exsorbet's stock in British Columbia, Canada through wash sales and matched trades. The complaint further alleged that Lee Ogle and Gary Cotten issued a forged Environmental Protection Agency endorsement letter of Exsorbet's oil absorbent product, and issued a false press release stating that Exsorbet had obtained $5 million in contracts. The violations charged in the complaint were Sections 5 and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(c)(1) of the Securities Exchange Act of 1934, and Rules 10b-5, 10b-6, and 15c1-2 thereunder.

The court permanently enjoined Ogle, Peters, and the three Kurkulises from violating the antifraud provisions of the federal securities laws after they consented to the judgments without admitting or denying the allegations in the SEC's complaint. Ogle was specifically enjoined from violating Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 and Regulation M thereunder and Section 5 of the Securities Act of 1933 ("Securities Act") and ordered to pay $571,000 in disgorgement of ill-gotten proceeds plus prejudgment interest of $230,419, and a civil penalty of $200,000. Reuben Peters was enjoined from violating Section 17(a)(2)-(3) of the Securities Act and was ordered to pay $205,000 in disgorgement plus prejudgment interest of $135,138, and a civil penalty of $25,000. Based on the entry of the judgment by the court, the SEC also ordered Peters suspended from association with any broker or dealer for a period of two months. Albinas Kurkulis was enjoined from violating Section 10(b) of the Exchange Act, Rule 10b-5, and Section 17(a)(1)-(3) of the Securities Act and ordered to pay $249,995 in disgorgement plus prejudgment interest of $83,965, and a civil penalty of $25,000. Based on the entry of the judgment by the court, the SEC also ordered Albinas Kurkulis barred from association with any broker or dealer with the right to reapply for association after three years to the appropriate self-regulatory organization, or if there is none, to the SEC. Paul Kurkulis was enjoined from violating Section 10(b) of the Exchange Act, Rule 10b-5, and Section 17(a)(1)-(3) of the Securities Act and ordered to pay $114,431 in disgorgement plus prejudgment interest of $38,453 and a civil penalty of $50,000. Andrew Kurkulis was enjoined from violating Section 17(a)(2)-(3) of the Securities Act and ordered to pay $172,708 in disgorgement plus prejudgment interest of $58,006 and a civil penalty of $20,000. Cotten was also permanently enjoined from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and was ordered to pay $161,349 in disgorgement plus prejudgment interest of $19,952 and a civil penalty of $200,000. The SEC dismissed its claims against Reuben Peters' securities firm, Peters Securities Co., L.P. The defendants who remain in the SEC's lawsuit are Ogle's Canadian business partner, Donald Tabor, and his Canadian company, Kailey Mining & Equipment Co., Ltd., and former San Diego stockbroker Robin Opp, against whom the SEC has filed a motion for a default judgment.